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Thanks to a nose-diving stock market, prominent telecommunications investor Laurence S. Zimmerman and his wife, Kimberly, face a lawsuit filed by their brokerage firm to foreclose on their multimillion-dollar Palm Beach, Fla., mansion. Since 1985, Zimmerman, 39, has owned and run New York City-based Landover Holdings Corp. That holding company, in turn, owns the wireless and Internet provider LandTel Communications. LandTel operates in France, Belgium, Germany and the Netherlands as a European telecommunications company providing wireless voice and Internet access services. Zimmerman also is an investor in Winstar Communications Inc., Advanced Radio Telecom Corp., Interworld Corp. and National Wireless, according to Securities and Exchange Commission records. The Zimmermans bought their 12,623-square-foot, neo-Mediterranean house at 210 El Vedado Way in 1998 for $4.2 million, according to county property records. The county appraiser’s records state it had a nearly $4.5 million market value in 2000. According to the foreclosure lawsuit filed in Palm Beach Circuit Court by PaineWebber last month, the Zimmermans opened individual stock trading accounts with the New York-based brokerage firm in July. They also opened two trading accounts for companies they controlled, the suit said. The accounts included a margin/loan call agreement. Over the next two months, the Nasdaq stock index fell by 12 percent, according to FT Interactive Data. By Sept. 25, the Zimmermans’ stock values sank below required loan-to-value ratios, according to the suit. When PaineWebber called in its margin loans, the Zimmermans and their companies owed $8 million to the brokerage firm, according to court documents. Laurence Zimmerman sold off his 8.4 percent ownership in National Wireless and paid the proceeds to PaineWebber, reducing the debt to about $4 million, including interest. To buy time, Zimmerman signed a confidential settlement agreement with PaineWebber last October, obligating the couple to make interest-only payments until Feb. 28, 2001, when the entire balance with interest was due. As part of the agreement, the Zimmermans gave PaineWebber a quit-claim deed to their house, plus a mortgage on the Palm Beach house. But the Zimmermans defaulted, PaineWebber claims. The company then filed suit, demanding $3.9 million plus annual interest at 13.9 percent. It also requested immediate foreclosure on the Palm Beach mansion to help satisfy the debt. The suit also asks the court to appoint a receiver to take possession of the home to preserve its condition and value. But PaineWebber may have to wait in line behind another Zimmerman creditor, Palm Beach Bank & Trust Co., which holds two prior mortgages on the house, with a face value of $3.65 million, according to property records. Because these were filed before PaineWebber’s mortgage, PaineWebber first must pay off the Zimmermans’ debt to the bank before it can gain marketable title to the house. In an interview, Laurence Zimmerman said he believes he and his wife will be able to pay off their debt to PaineWebber before their house is foreclosed. “We don’t think we have an issue here,” he said. Michael T. Kranz, a partner at Jones Foster Johnston & Stubbs in West Palm Beach who is representing PaineWebber, declined to comment on the suit. This isn’t the Zimmermans’ only legal headache. In February, John L. Atkinson of Palm Beach Gardens sued Laurence Zimmerman in Palm Beach Circuit Court, claiming that Zimmerman defrauded him of $1.75 million. The suit alleges fraud, unjust enrichment, negligent misrepresentation, breach of fiduciary duty, wrongful conversion, Florida Racketeering Act violations and violation of the state’s securities laws. Zimmerman persuaded Atkinson to let Zimmerman invest in business ventures or securities, the suit states. Atkinson wrote two checks to Zimmerman in November 1999 � one for $500,000 and the other for $250,000. Then, on June 15 — one month before the Zimmermans opened their brokerage accounts with PaineWebber — Atkinson wired another $1 million for Zimmerman to invest. The suit states that all money initially was to be placed in escrow. But none of it was, according to the suit. Atkinson claims that in return for his investment, Zimmerman never provided him ownership interests in any business ventures or securities. Atkinson and his attorney, Douglas A. Willis of Palm Beach Gardens, Fla., did not return phone calls for comment. Zimmerman called Atkinson’s allegations “totally unfounded” and dismissed the plaintiff as a “disgruntled investor.” Zimmerman said Atkinson sent him $1.25 million to invest in Bazillion, a startup telecom company that failed last year after an infusion of $26 million in investor funds. Zimmerman said he invested another $250,000 of Atkinson’s money in other securities. “Jack is looking for someone else to take him out of his pain and is making statements about me that are untrue and unfounded,” Zimmerman said. Hugo H. Ottolenghi contributed to this story.

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